IDFC First Bank Q2 Results: Net profit surges 35% to Rs 751 cr, NII rises to Rs 3,950 cr

Private sector bank IDFC First Bank on Saturday reported a net profit of Rs 751 crore in the second quarter of this fiscal, which was 35 per cent more than Rs 556 crore reported a year ago.

On a consolidated basis, Profit after Tax stood at Rs 746.85 crore for the quarter ended September 30 which was up 31.6% YoY versus Rs 567.19 crore reported by the company in Q2FY23.

The net interest income (NII) was at Rs 3,950 crore, up 31 per cent from the year-ago period. The lender's net interest margin (NIM) was at 6.32 per cent compared to 5.83 per cent in the year-ago quarter.

The consolidated net profit was up over 2 per cent quarter on quarter. The private lender had reported a profit after tax (PAT) of Rs 731.51 crore in the April-June-ended quarter.

The gross non-performing assets at the end of the September 2023 quarter stood at Rs 3,747.8 crore, as compared to Rs 3,603.4 crore at the end of Q1 FY24. The gross GNP ratio improved to 2.11 per cent from 2.17 per cent in the April-June period.

Here are the top highlights:

• Core Operating Profit (pre provision operating profit excluding trading gains) grew strongly by 38%
YOY from Rs. 1,052 crore in Q2-FY23 to Rs. 1,456 crore for Q2-FY24.

• Net Interest Income (NII) grew 32% YOY from Rs. 3,002 crore in Q2-FY23 to Rs. 3,950 crore in Q2-
FY24.

• Net interest Margin (gross of IBPC and sell-down) was 6.32% in Q2-FY24 as compared to 5.83% in
Q2-FY23 and 6.33% in Q1-FY24.

• Fee and Other Income grew by 46% YoY from Rs. 945 crore in Q2-FY23 to Rs. 1,376 crore in Q2-FY24.
Retail fees constitute 93% of the overall fees for the quarter Q2-FY24.

• Core Operating income (NII plus Fees, excluding trading gains) grew 35% from Rs. 3,947 crore in Q2-
FY23 to Rs. 5,326 crore in Q2-FY24.

• Operating Expense grew by 34% YoY from Rs. 2,895 crore in Q2-FY23 to Rs. 3,870 crore in Q2-FY24.

• Provisions increased 25% YOY from Rs. 424 crore in Q2-FY23 to Rs. 528 crore in Q2-FY24. The credit
cost (quarterly annualized) as % of average funded assets for Q2-FY24 was 1.19%.

• RoA (annualized) improved from 1.07% in Q2-FY23 to 1.16% in Q2-FY24.

• RoE (annualized) improved from 10.13% in Q2-FY23 to 11.03% in Q2-FY24.

Assets Quality

• Gross NPA (GNPA) of the bank has improved to 2.11% as of 30 September 2023 from 3.18% of 30
September 2022.

• Net NPA (NNPA) of the bank has improved to 0.68% as of 30 September 2023 from 1.09% of 30
September 2022.

• GNPA of the Retail, Rural and SME Finance has improved to 1.53% as of 30 September 2023 from
2.03% of 30 September 2022.

• NNPA of the Retail, Rural and SME Finance has improved to 0.52% as of 30 September 2023 from
0.73% of 30 September 2022.

• Excluding the infrastructure financing book which the Bank is running down, the GNPA and NNPA
of the Bank would have been 1.69% and 0.46% respectively as of September 30, 2023.

• SMA-1 and SMA-2 (31-90 DPD which is the pre-NPA stage) in Retail, Rural and SME Finance portfolio
has reduced from 0.89% as of September 30, 2022 to 0.77% as of September 30, 2023.

• Collection efficiency for urban retail business (excluding prepayments and EMI arrears) in current
bucket continues to remain high at 99.5%.

• Provision coverage ratio (including technical write-off) of the bank has increased to 84.09% as of
September 30, 2023 from 76.49% as of September 30, 2022.

• Standard restructured book as % of total funded assets improved to 0.38% from 1.03% at September
30, 2022.

“Diversified customer deposits are the most important foundational capability for a Bank. We are sincerely thankful for such goodwill of our esteemed customers because of which our customer deposits continue to grow well at 44% YOY, and our CASA ratio continues to be strong at 46.4%. We are happy that our asset quality continued to improve. On the Retail, Rural & SME business, where our Bank particularly specializes in, the Gross NPA and Net NPA have remained very low at 1.53% and 0.52%, respectively. We will stay very watchful on this front all the time. We have registered profit of Rs. 1,516 crore in H1-FY24, representing a growth of 47% over PAT of Rs. 1,030 crore in H1-FY23,” said V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank.

Besides this, the Mumbai-based bank declared the re-appointment of Aashish Kamat and Dr. (Mrs.) Brinda Jagirdar as independent directors of the bank.

Earlier this month, IDFC got an approval from the CCI for its merger with IDFC First Bank.

The Boards of IDFC First Bank Ltd and IDFC Limited approved their merger with each other in July this year. The share exchange ratio for the amalgamation of IDFC Limited with IDFC First Bank shall be 155 equity shares of a face value of Rs 10 of IDFC First Bank for every 100 equity shares of face value of Rs 10 of IDFC Limited.

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